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Speaker 1: Good morning. It's Wednesday, the twentieth of September here in London.

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Speaker 1: This is the Bloomberg Daybake You Podcast. I'm Caroline Hepkit and.

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Speaker 2: I'm Stephen Carroll. Coming up today the eaves Arsla Vondeline

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Speaker 2: tells us China's massive electric vehicle subsidies need to be investigated.

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Speaker 1: The CBI calls off its AGM at the last minute

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Speaker 1: amid cash flow challenges at the Business Lobby Group.

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Speaker 2: And we bring you a special report on the game

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Speaker 2: changing oil finds that could transform Namibia as long as

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Speaker 2: they can avoid the pitfalls.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 2: The head of the European Commission says that EU needs

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Speaker 2: to investigate massive subsidies China gives its electric vehicle industry Arsla.

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Speaker 2: Vanderlin told Bloomberg the bloc won't accept unfair competition.

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Speaker 3: We want the level playing field for our companies, and

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Speaker 3: what we see is massive subsidies in the EV sector

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Speaker 3: in China, which is of course unleveling our playing field,

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Speaker 3: and we do not accept this in the internal market

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Speaker 3: for our companies.

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Speaker 4: So we do also not accepted for Chinese companies.

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Speaker 2: Vonderline's European Commission announced the anti subsidy investigation last week,

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Speaker 2: which could lead to tariffs sun made in China ev imports.

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Speaker 2: Beijing has called the move a naked act of protectionism

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Speaker 2: and could respond by restricting access to its market. China

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Speaker 2: is the biggest market for a number of German car makers,

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Speaker 2: which sold four point six million cars there last year.

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Speaker 1: Well, speaking of vehicle production, UK Prime Minister Vici Sunac

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Speaker 1: says that he plans to roll back green pledges in

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Speaker 1: a bid to regain popularity. Bloomberg has learned that Sunac

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Speaker 1: is considering pushing back a deadline on the phasing out

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Speaker 1: of fossil fuel vehicle sales. These shifts comes as the

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Speaker 1: Conservative Party's recent success campaigning against the London Mayor Sadiq

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Speaker 1: Kahn's green agenda. Now, the mayor has derided Sunac's move.

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Speaker 4: This is basically, you know, lazy politics from a weak

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Speaker 4: prime minister throwing red meat two of his backbenches because

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Speaker 4: he's so weak and in effectual.

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Speaker 1: It's not only Sadik Khan pouring scorn on the idea.

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Speaker 1: Conservative former Business secretary Alec Sharmer says that the chance

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Speaker 1: won't help economically or electorally.

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Speaker 2: The Confederation of British Industry has postponed at the annual

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Speaker 2: General Meeting at the last minute over concerns about cash flow.

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Speaker 2: Remember Exew and Parts has the story.

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Speaker 5: The CBI has long been Britain's biggest business lobby group.

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Speaker 5: Now Sky News reports it's thought to be as little

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Speaker 5: as four weeks away from running out of money. Up

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Speaker 5: until early this morning, the CBI's website listed it's AGM

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Speaker 5: due to kickoff today at ten am, but the business

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Speaker 5: group told members yesterday its big annual meeting is being

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Speaker 5: postponed due to cash flow issues. Its money problems come

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Speaker 5: after dozens of the UK's biggest companies suspend an engagement

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Speaker 5: with the CBI in the wake of a series of

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Speaker 5: allegations of serious sexual misconduct to the group in London.

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Speaker 5: I'm you in pots Bloomberg Radio Now.

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Speaker 1: When it comes to UK inflation data, which is due

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Speaker 1: out at seven am London time today, it's expected to

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Speaker 1: have increased to seven percent last month from six point

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Speaker 1: eight percent in July, according to a Bloomberg survey, driven

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Speaker 1: by rising fuel prices. Core inflation, though which excludes energy

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Speaker 1: and food, is expected to decline by tenth of one

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Speaker 1: percent to six point eight percent, but the economic outlook

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Speaker 1: for the UK has darkened. All of this makes it

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Speaker 1: a difficult backdrop for the Bank of England's rate decision

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Speaker 1: on Thursday. Markets are now pricing in close to an

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Speaker 1: eighty percent chance of a rate hike of twenty basis points.

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Speaker 2: The Federal Reserve is expected to pause rate hikes today

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Speaker 2: for the second time this year, while leaving the door

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Speaker 2: open for another increase as early as November. With inflation

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Speaker 2: still well above the two percent target for the Fed

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Speaker 2: and the US economy resilient, to officials may pencil in

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Speaker 2: one more hike into their quarterly projections. Bridgewasher Associate's co

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Speaker 2: chief investment Officer Karen Carneil Tambor says the fare maybe

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Speaker 2: slower to cut rates than many expect.

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Speaker 6: The bar is high to either raise or lower rates

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Speaker 6: from where we are today. When you look at what

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Speaker 6: it takes to get fast rate declines, usually you need

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Speaker 6: the economy collapsing pretty quickly. There's a sense of urgency, right,

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Speaker 6: economies collapsing sense of urgency, lower rates as fast as

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Speaker 6: you can. That's very far.

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Speaker 4: From where we are today.

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Speaker 6: We don't have a collapsing economy creating that, and inflation

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Speaker 6: is still uncomfortably high. It's not as high as it was.

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Speaker 6: It has been coming down, but the impetus for I

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Speaker 6: got a lower rates quickly is certainly not there.

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Speaker 2: You can hear that full conversation with Karen Carneel Tombo

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Speaker 2: recorded at the end of August on the latest episode

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Speaker 2: of Bloomberg. Well that David Rubinstein will bring you that

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Speaker 2: FED rate decision live here on Bloomberg at seven pm

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Speaker 2: London time, followed by Jerom Pal's press conference thirty minutes later.

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Speaker 1: President Joe Biden is calling on world leaders to stand

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Speaker 1: with Ukraine in its war against Russia. He made the

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Speaker 1: appeal at the UN General Assembly in New York.

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Speaker 7: If you allow Ukraine to be carved up, is the

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Speaker 7: independence of any nation secure? I'd respectfully suggest the answers, No.

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Speaker 7: We have to stand up to this Nekedve aggression today

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Speaker 7: and deter other would be aggressiors tomorrow.

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Speaker 1: Biden's remarks attracted applause from UN delegates, including his Ukrainian

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Speaker 1: counterpart Volodimir Zelenski, who was in the audience. Concerns have

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Speaker 1: been growing over the cost of backing Ukraine's fight with

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Speaker 1: Kiev's forces struggling to make major battlefield gains. Bloomberg understands

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Speaker 1: that one G seven official sees the war lasting as

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Speaker 1: long as seven years, and says that allies need to

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Speaker 1: plan financially to continue support for Ukraine.

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Speaker 2: Consumer has accidentally caught a glimpse of Microsoft's future video

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Speaker 2: game plans after the tech giant mistakenly provided confidential information

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Speaker 2: to a federal court website. The details were part of

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Speaker 2: the FTC's antitrust suit against its takeover of Activation Blizzard

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Speaker 2: unannounced games under refreshed Xbox console. The information has subsequently

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Speaker 2: been removed. Karl and I've been fascinated by the latest

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Speaker 2: piece from Bloomberg opinion columnist Meren's Somerset web. She's been

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Speaker 2: looking at the bite let market in the UK. We

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Speaker 2: know that landlords have been selling off. We've been talking

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Speaker 2: about that in the program as well. Of course that's

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Speaker 2: due to higher interest rates as well. But she's asking

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Speaker 2: the question, who would want to be a landlord in

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Speaker 2: this market? Despite the fact that rents are rising at

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Speaker 2: one of the fastest paces on record, A number of

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Speaker 2: by the record number of bite let investors are planning

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Speaker 2: to sell as well. New bite let mortgages have slumped,

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Speaker 2: their only eight percent of the total market compared to

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Speaker 2: forty percent at the same period last year. Those are

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Speaker 2: figures from the Financial Conduct Authority. MEREN goes through a

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Speaker 2: whole list of reasons why landlords are being turned off

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Speaker 2: the market. Okay, interest rates, but there's also rising regulatory costs,

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Speaker 2: there's new net zero rules coming, there's been changed to

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Speaker 2: wealth taxes and really interesting, I think thought the risk

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Speaker 2: of rent control for landlords. Scottish rents Marin points out

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Speaker 2: have been on new leases going up by more than

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Speaker 2: the average thirteen point four percent in the last year,

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Speaker 2: and that's because Scottish rent controls only allow for a

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Speaker 2: three percent rise in rents for existing tenants every year.

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Speaker 2: Starts making landlords more keen to leave the market in

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Speaker 2: a desperate bid to push up rents between tenancies. If

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Speaker 2: they're staying on, this is a huge problem in the market.

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Speaker 2: If you're trying to rent, it's more difficult than ever.

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Speaker 1: Yeah, it's a huge problem. Look maresu set Web always

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Speaker 1: has an absolutely trench in view. She gets to the

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Speaker 1: heart of the matter, particularly when it comes to sort

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Speaker 1: of personal finances. And these are personal finances because so

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Speaker 1: many landlords. It's basically an amateur's game in the UK

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Speaker 1: and the rental market. It's a bind right for the landlords,

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Speaker 1: for the renters, but also for policymakers because some of

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Speaker 1: this has to be unraveled in order to kind of

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Speaker 1: deliver the sort of market that the UK really needs,

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Speaker 1: and as rates go up, I think the pressures are enormous.

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Speaker 1: But it's a fantastic read for marenzomset Web. But she's

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Speaker 1: always really pointed in how she explains the topic, So yeah,

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Speaker 1: it's an interesting one.

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Speaker 2: Let's bring you more into our interview with the European

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Speaker 2: Commision President ars L Vanderline. Now she's been talking about

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Speaker 2: how this is a decisive moment in Ukraine's bid to

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Speaker 2: be common member of the EU, but she's also been

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Speaker 2: discussing the ease investigation as Chinese electric vehicle subsidies with

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Speaker 2: Bloomberg's Francine Laqua.

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Speaker 4: So first of all, why are we doing this?

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Speaker 3: We like competition, but it has to be a fair

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Speaker 3: competition and we want the level playing field for our

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Speaker 3: companies and what we see is massive subsidies in the

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Speaker 3: EV sector in China, which is of course unleveling our

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Speaker 3: playing field, and we do not accept this in the

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Speaker 3: internal market for our companies, so we do also not

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Speaker 3: accept it for Chinese companies, and therefore this is the

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Speaker 3: investigation now into subsidies in EV's in China.

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Speaker 8: Since actually announcing the investigation, talked to Chinese efficients.

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Speaker 4: Yes, we are of course in constant contact.

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Speaker 3: The executive vice President will travel to China and discuss

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Speaker 3: it also with the Chinese. But we have now to

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Speaker 3: look at the figures and we're moving on.

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Speaker 8: In the past, there is always a tit for tats,

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Speaker 8: some kind of retaliation or certainly China making noise back.

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Speaker 4: Will that happen this we'll see.

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Speaker 3: But important is that for US it's very clear we

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Speaker 3: want competition. We want competition on quality, cost effectiveness, but

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Speaker 3: not on subsidies. And therefore this is something, as I said,

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Speaker 3: we would not tolerate and for our own companies and

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Speaker 3: within the single market, so it has to be fair play.

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Speaker 8: It is a change in shift towards China. I guess

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Speaker 8: Europe has always tried to remain quite neutral, as there

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Speaker 8: have been trade wards between the US and China.

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Speaker 3: Well, I have defined our relationship with China earlier this

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Speaker 3: year in a headline de risk not ta couple, not

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Speaker 3: a couple means we have many topics where we can

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Speaker 3: excellently and have to cooperate, for example the fight against

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Speaker 3: climate change, but there are also risks, for example the

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Speaker 3: dependency on supply chains in the critical raw materials, or

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Speaker 3: for example, when we see the risk that the market

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Speaker 3: is distorted by subsidies, we have to address.

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Speaker 8: That prison verdline. You've also always been very clear in

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Speaker 8: Europe's unwavering support for Ukraine.

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Speaker 4: How do you see it ending.

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Speaker 3: There's a strong support for Ukraine for as long as

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Speaker 3: it takes. We've said it from the very beginning, and

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Speaker 3: it is amazing to see that the people in Europe

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Speaker 3: have completely understood. This is about Ukraine, yes, but it's

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Speaker 3: also about the question respect for the international law, for

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Speaker 3: the UN Charter, and.

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Speaker 4: This is very important for us because the rules of

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Speaker 4: the world.

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Speaker 3: It defines the peace architecture that we do have, and

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Speaker 3: therefore support is strong and higher.

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Speaker 8: Will the US also shows saying unwavering support or do

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Speaker 8: you worry that in an election year the focus will

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Speaker 8: be less on Ukraine and sending ammunition and sending armament.

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Speaker 3: The support of the United States for Ukraine has been impressive,

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Speaker 3: and I think just working together as a European Union

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Speaker 3: with the US also really scaled up the support that

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Speaker 3: we could give to Ukraine. And I'm confident that the

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Speaker 3: American people will stand by Ukraine too, because I mean,

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Speaker 3: here in New York, we are listening intensively to the

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Speaker 3: debates and it shows that this knowledge about it is

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Speaker 3: about our rules based order is there, and this is

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Speaker 3: what we want to defend.

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Speaker 8: What if President Trump becomes a president actually the United States,

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Speaker 8: how will you deal with that? And would does that

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Speaker 8: mean for Ukraine?

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Speaker 3: Well, it's a good rule not to comment on that,

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Speaker 3: and we have dealt with the topics in the past,

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Speaker 3: So I'm confident that we will stand by Ukraine, the

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Speaker 3: US and the.

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Speaker 8: Europeans may the final question on E enlargement, how quickly

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Speaker 8: do you think Ukraine could join and others could join.

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Speaker 3: I and the blow a maze to see how Ukraine

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Speaker 3: is doing very difficult reforms while they are fighting a war.

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Speaker 4: This is impressive to see that.

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Speaker 3: So I'm very confident if they keep the pace and

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Speaker 3: I see that they're absolutely motivated, that this is a

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Speaker 3: decisive moment, and we know if I look at the

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Speaker 3: future of Europe. Of course enlargement is a merits based process.

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Speaker 3: But if I look at the future of Europe.

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Speaker 4: I'm convinced Ukraine is a member of the European Do

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Speaker 4: you have a target date in mind or it's not

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Speaker 4: a sharp date.

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Speaker 3: It's a merit space process, so they can be fun

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Speaker 3: asked if they deliver.

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Speaker 4: And what I see as impression.

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Speaker 2: That was the President of the European Commissioner Our Slavonderlon

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Speaker 2: speaking to Bloomberg Francine Laqua in New York.

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Speaker 1: Okay, So a key interview for you. Now to another

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Speaker 1: important story. It's touted by some as the world's biggest

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Speaker 1: ever deep water oil find. This is the discovery off

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Speaker 1: the shores of Namibia last year by Total Energies and

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Speaker 1: Shell of an estimated eleven billion barrels of crude oil.

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Speaker 1: It's generated, of course, understandable excitement in the southern African

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Speaker 1: country and elsewhere. Bloomberg's Paul Burkertt joins us now for

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Speaker 1: more from Johannesburg. Paul, great to have you with us,

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Speaker 1: and for a very interesting story. How big are the

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Speaker 1: oil discoveries that have been made off Namibia?

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Speaker 9: Yeah, well, it's hard to say right now, I mean,

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Speaker 9: what we do know is that total and Shell last

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Speaker 9: year made what they kind of characterized as signal ifigant

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Speaker 9: discoveries and there have been estimates by by consultancies that

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Speaker 9: that run up to eleven billion barrels because after those

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Speaker 9: two wells were drilled, then there were a number of

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Speaker 9: other wells drilled. But kind of the focal point of

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Speaker 9: what what everyone's watching right now are are the appraisal campaigns.

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Speaker 9: So there's a lot of activity in those waters offshore

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Speaker 9: and then maybe there are three rigs I think at

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Speaker 9: the moment, but multiple well campaigns by by Shell and

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Speaker 9: Totel to see whether these discoveries are commercially viable or not.

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Speaker 9: And that's you know, then we'll know more. But but

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Speaker 9: the estimates, you know go up to a billion eleven

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Speaker 9: billion barrels, so quite quite big.

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Speaker 2: What could this mean for maybe a.

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Speaker 9: Uh, well, theoretically, I mean that revenue could uh just

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Speaker 9: from those two discoveries, the first initial uh the first

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Speaker 9: to last year could double GDP by twenty four so

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Speaker 9: that's quite significant. Namibia has it's very has a very

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Speaker 9: small population of two point seven million people, and the

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Speaker 9: inequality is quite high. So you know what happens with

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Speaker 9: those funds that that also you know that will also

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Speaker 9: be watched. And you know if if we look at

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Speaker 9: Angola or Mozambique, which is in the same region, you

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Speaker 9: know that that hasn't worked out very well. So a

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Speaker 9: lot of capacity is needed to prevent that in the

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Speaker 9: minerals department, which is quite small right now. Yeah, you

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Speaker 9: can't really you can't plan for these things. We do

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Speaker 9: need to prepare for them once you know you have

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Speaker 9: the resource.

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Speaker 1: Paul, just very briefly, how long do you think it's

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Speaker 1: going to take? What's the timeline?

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Speaker 9: The timeline, I mean, the most optimistic timeline is twenty

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Speaker 9: twenty nine. We would see the first oil from I

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Speaker 9: think the total well and then shells would fall yeah,

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Speaker 9: a year later, so pretty quickly. And oil companies are

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Speaker 9: trying to do that because they're racing against the energy transition,

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Speaker 9: so you know, they're trying to be as fast as

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Speaker 9: they can with these developments.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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